Friday, 7 December 2012

China's biotech boom

The  government has set up biotech zones across China
In September, U.S. medical technology company Medtronic announced a $755 million merger with Chinese Orthopaedic devices manufacturer KangHui. In a press release, Medtronic’s executive vice president Chris O’Connell described China as “one of the fastest growing medical device markets with significant scale opportunities.”
The Medtronic merger follows a series of other M&As in the Chinese biotech sector. According to the Centre for Asia Private Equity Research, in the first half of the current year, private equity investments in the Chinese healthcare sector amounted to $489 million, double that of last year. The centre attributed this sudden rise to the increased spending by the Chinese government, and its reforms measures.
   Significantly, in its 12th Five Year Plan from 2011 to 2015, Beijing has allocated $3 billion on innovative medicine, the cultivation of new varieties of genetically modified organisms, and the prevention and control of infectious diseases. The government’s efforts to promote the industry also include legal and regulatory reform measures. For example, in 2011, it relaxed certain restrictions in respect of foreign investment in hospitals and diagnostic centres.
   The Chinese government is also setting up biotech zones across the country to support for new drug innovation, which until now has been a weakness of the Chinese biotech industry. According to Richard Bird, counsel at Freshfields Bruckhaus Deringer, China has been relatively slow in this area, and there are currently not many promising products and technologies in the pipeline, he says.
The foreign pharmaceutical companies too have made investments mostly in their own R&D and biomedical centres. In November 2009, the U.S. pharmaceutical giant Novartis announced an investment of $1 billion over a period of five years. This money is going into its Chinese research facility, and also the expansion of the Novartis Institute for BioMedical Research in Shanghai.
Read more: Asian Legal Business

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